I have a Thinkpad X30 laptop with three mouse buttons below the keyboard. Unfortunately, the middle button doesn't actually function as a middle-click, instead, it has some sort of confusing scroll function that worked with the trackpoint and I could never get to figure out. Any idea as to how I can get normal middle-click functionality working on Windows XP with this button?

I personally use the scroll feature, which is the default. It takes a couple days to get used to it, but it provides better control over scrolling than the trackpad. To use it, click and hold it with your thumb (your cursor will change to scroll bars), then use your index finger on the trackpoint to scroll up/down. After a couple days your thumb will naturally find the 'lip' of the middle button.

Before anyone claims this to be a Ultranav touchpad again, I explicitly states that this is a Synaptics OEM touchpad, and should work with a Synaptics touchpad driver. (Which works on my X31 too). If you install enough Linux on Thinkpads, you'll realize most of them uses Synaptics Touchpads.